So-called white box vendors (or "Shanzai," as they are sometimes called, even though it sounds derogatory) still exist in China. They assemble products from standardized parts and sell them to operators, OEMs/ODMs or even to the gray market. Now, some of the non-branded, local mobile handset design houses are wising up, changing their business model and moving up the food chain.

The target for these new brands remains domestic. But it’s important to note that vendors are not just slapping brand names onto generic smartphones. They’ve made a conscious effort to create a whole storefront with a unique brand, a la, the Apple Store, rather than selling in crowded retail shops where a vast array of smartphones are sold.

When I say storefront, I mean a cubbyhole on Huanqiang Road here, nothing like the sleek Apple stores in Manhattan and Palo Alto. Still, Chinese manufacturers have a new slogan: Branding matters.

Who leads China smartphone market? (% share based on unit shipment)

(Source: IHS iSuppli Research, August, 2012)

New brands like Kente, Meizu, SgiFe, ThL and Zopo – many of which have emerged in the last 12 months – have a ways to go before they can crack IHS iSuppli’s Chinese Top Ten. Nonetheless, these upstarts are thinking big, and many already offer a 5-inch-screen smartphone.

Here's what we found during a recent tour of Shenzhen's consumer electronics outlets.

@dylan.mcgarth: What's so amazing about it? China is a huge market, large enough to support a number of home grown vendors targeting the local market. The language barrier will mostly prevent us hearing about them, but that's only one reason. China is Terra Incognita for most westerners and our understanding is of necessity surface at best.
It will be interesting to see how the Chinese market develops. Right now, those vendors are all trying to establish themselves and get local market share. There will inevitably be the same sort of shakeouts that happen in any industry as some efforts fail and go under or are absorbed, and others grow larger, till we'll see a few dominant players.
The fun will begin when the survivors get big enough to need broader horizons, and start trying to sell to other parts of the world.

@junko: what I find surprising is that Samsung has big market share in China in spite of Huawei and ZTE homegrown brands. What would be nice to know is how these handset makers differ in their business models with carriers in China. Obviously some of them are showing losses but I don't know if Samsung is doing any better in China.
I realize many of these models are few years old in China... how often to consumers recycle their old with the new handsets?
MP Divakar

@junko: I am curious, are these China handset makers offering only mobile phones or do they also offer phones & tablets like Apple & Samsung do? If it is the latter, are they leveraging the invested R&D in processors and using the same processor platforms for both?
MP Divakar

"what I find surprising is that Samsung has big market share in China in spite of Huawei and ZTE homegrown brands."
No surprise here. From where I sit, smartphones are fashion accessories that just happen to include technology, and the purchase decision is often made for fashion reasons.
People over here often buy phones because they are "cool", and the coolness factor is critical. Purchasers gratifying that desire want something at least as cool as and preferably cooler than the ones used by their friends.
Given that, it it a surprise that a world-wide brand name will get market share? I very much doubt Chinese consumers are that different from those elsewhere.

"if any vendor neglect the LTE-TDD development, their market share will be limited. Let's see what iPhone will do in this market."
I think that Clearwire is going with LTE-TDD and Sprint has an agreement with them to offload their LTE network.
So any phone that supports Sprint (which includes the iPhone5) probably has to support LTE-TDD.

Some are offering both. One thing you should remember, though, is that there is no R&D involved for these system guys. Companies like MediaTek give phone vendors (and tablet makers) the turnkey solutions. Yes, often times, they are using the same platform.